Regulation by the crowd

Posted on February 5, 2009  /  0 Comments

In conventional thinking, complex industries with oligopoly characteristsics such as telecom require regulation by specialized agencies.  Interconnection must be ensured; spectrum must be managed, etc.  In addition, information asymmetries between operators and customers necessitate a degree of regulation of matters such as quality of service, billing accuracy and truth in advertising.  For example, the Telecom Regulatory Commission of Sri Lanka has had a consumer relation unit since 1999.

However, many regulators do not perform their functions satisfactorily.   To take consumer protection functions, can anyone name a significant intervention by the TRC?  The last I recall is the publication of comparative fixed-line QOS data in early 2003.

Interestingly, the blogsphere, especially the subset of Sinhala bloggers, is emerging as a force in protecting consumers interests.  They are the first to spot changes in terms of service offerings and as seen from a recent post by Kanabona, they also probe behind various claims made in ads. LIRNEasia spotted this trend early and is working hard to develop tools that will make regulation by the crowd more effective.

It can’t be easy for the operators now:  inept regulators with real power that can be (and is) exercised arbitrarily; analysts who pounce on every little thing and whose views may move markets; and now bloggers!

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